INDUSTRY OVERVIEW REDACTED REDACTED Sources of Information REDACTED REDACTED The Newzoo report

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1 Certain information, including statistics and estimates, set forth in this section and elsewhere in this document have been derived from two industry reports, namely the Newzoo Report and the Frost & Sullivan Report, commissioned by us in connection with the [REDACTED] and independently prepared by Newzoo and Frost & Sullivan, respectively. We believe that the sources of such information are appropriate, and we have taken reasonable care in extracting and reproducing such information. We have no reason to believe that such information is false or misleading or that any fact has been omitted that would render such information false or misleading in any material respect. However, neither we nor any of the Relevant Persons have independently verified such information, and neither we nor any other party involved in the [REDACTED] are giving any representation as to the accuracy or completeness of such information. As such, investors are cautioned not to place any undue reliance on the information, including statistics and estimates, set forth in this section or similar information included elsewhere in this document. For a discussion of risks relating to our industries, please refer to the section headed Risk Factors Risks Relating to Our Business and Industries in this document. Sources of Information In connection with the [REDACTED], we commissioned Newzoo and Frost & Sullivan to conduct market research on the global entertainment industry, certain gaming-related industries, our brand and the lifestyle of gamers. We commissioned Newzoo to conduct market research on global games, gaming peripherals and systems, esports, mobile gaming, smartphones and software, as well as virtual reality, augmented reality, virtual credits and the lifestyle of millennials. We commissioned Frost & Sullivan to conduct market research on the global entertainment industry, our competitive landscape, our brand and the lifestyle of gamers. Each of Newzoo and Frost & Sullivan uses different assumptions and estimates, and limitations on certain data available to them may impact the comparability of certain industry data. See Risk Factors Risks Relating to the [REDACTED] Differences in the assumptions and estimates adopted by the two industry consultants that we commissioned to prepare reports and limitations on certain data available to them may impact the comparability of certain industry data. The Newzoo report Newzoo is a provider of market research, intelligence and advice to companies in the global gaming and esports markets. We have agreed to pay a commission fee of approximately US$200,000 for the Newzoo Report, which is dated as of October 17, In preparing the Newzoo Report, Newzoo utilized both primary and secondary research. Their primary research consists of annual surveys commissioned by Newzoo of consumers who play games and are between the ages of 10 and 65 (between 10 and 50 in certain Asian countries) in 25 countries, covering a broad range of topics across all gaming platforms and business models. Newzoo also conducts annual surveys of gamers, who play at least once a month, in relation to gaming peripherals in seven countries. Data for the Newzoo Report was based on fieldwork conducted in March, September and November of Their secondary research utilizes information and statistics published by government departments or international organizations, publications and studies by industry experts, public company annual and quarterly reports, Newzoo s other research reports and models, online resources and data from Newzoo s research database. Newzoo s projections on the size of each of the gaming-related markets take into consideration various factors, including (i) historical market size, (ii) the public filings of, and other publicly available information on, companies in the games and gaming-related markets and those companies projections of their own results of operations, (iii) the projections of other industry experts and (iv) Newzoo s views and estimates of industry developments. Newzoo s analysis on millennials is based on similar primary and secondary research as described above. The reliability of the Newzoo Report may be affected by the accuracy of the foregoing assumptions and factors. 103

2 The Frost & Sullivan report Frost & Sullivan is an independent global consulting firm that offers industry research and market strategies covering various industries including technology, media, telecom and consumer products. We have agreed to pay a commission fee of approximately US$83,000 for the Frost & Sullivan Report, which is dated as of June 23, In preparing the Frost & Sullivan Report, they conducted primary research, which involved discussions about the status of the global entertainment industry with industry experts and leading industry participants and a brand perception study. Frost & Sullivan conducted an online survey completed by target consumers of gaming devices from June 2, 2017 through June 6, 2017 in Australia, China, Germany, the United States and the United Kingdom with 301, 500, 300, 505 and 508 survey respondents, respectively. All the respondents to the survey were between 12 and 45 years old (95% were between 12 and 35 years old), spent at least half an hour on games every day and bought gaming devices in the past year. Their secondary research utilized information and statistics published by government departments, publications and studies by industry experts, public company annual and quarterly reports, Frost & Sullivan s other research reports, online resources and data from Frost & Sullivan s research database. Frost & Sullivan s projections on market sizes were obtained from historical data analysis plotted against macroeconomic data as well as specific related industry drivers. The Frost & Sullivan Report was compiled based on certain assumptions, including (i) the steady growth of the global economy in the next decade, (ii) the stability of the global social, economic, and political environment in the forecast period and (iii) that market drivers, such as expanding Internet access, growing demand from millennials and rising income and purchasing power, are likely to drive the growth of the global entertainment industry (including the global games market). The reliability of the Frost & Sullivan Report may be affected by the accuracy of the foregoing assumptions and factors. Directors confirmation After making reasonable enquiries, our Directors confirm that there has been no adverse change in the market information presented in the Newzoo Report or the Frost & Sullivan Report since the date of each report which may qualify, contradict or impact the information in this Industry Overview section. Global Entertainment Industry Overview The global entertainment industry comprises games, cinema, TV and video, publishing, music and broadcast. Rising purchasing power, technological innovation and increasing adoption of digital content have contributed to the overall growth of the global entertainment industry. Total revenue for the global entertainment industry has increased from US$801.0 billion in 2012 to US$869.8 billion in Total revenue of the global entertainment industry is expected to reach US$950.9 billion in The table below sets forth the revenue and growth of the global entertainment industry from 2012 to 2016 and the estimated revenue and growth of the industry from 2017 to 2021: Total Revenue of the Global Entertainment Industry (US$ billions) CAGR Games % 5.1% Cinema % 3.7% TV & Video % 2.6% Publishing % -0.5% Music % 2.0% Broadcast % 0.2% Total % 1.7%

3 Source: Frost & Sullivan Report Consumer spending on mobile, PC and console games (excluding hardware) Box office and cinema advertising TV subscriptions including cable TV, IPTV, satellite TV, Digital Terrestrial TV and Over-The-Top (such as Netflix), public license fees and consumer spending on physical video Sales of both print and digital editions of newspapers, magazines and books and advertising spending Physical music, digital music and live music Radio subscriptions and radio advertising According to Frost & Sullivan, the global entertainment industry is likely to benefit from several social, demographic and economic trends. Increased internet penetration and the technology boom in the past two decades, with new players like Netflix and Google changing consumption habits, have increased entertainment spending. From a demographics perspective, there is a growing demand for entertainment services and products from millennials who are early adopters of technology, use digital devices including PCs and smartphones more often than other generations and have a high willingness to purchase digital products and services. In addition, economic trends such as the rising per capita average income in many countries, rising purchasing power and increased propensity to spend are also likely to continue to drive demand for entertainment products and services. Global Games Market Overview According to Frost & Sullivan, the global games market is the fastest growing segment within the global entertainment industry with a CAGR of approximately 8.8% from 2012 to 2016, and a CAGR of 5.1% from 2017 to According to Newzoo, the Americas are the largest games market globally, followed by China and Asia Pacific (ex-china). However, as these largest markets mature, growth is expected to come from developing regions such as Latin America, the Middle East and Africa and Southeast Asia. These regions benefit from a healthy economic outlook, favorable demographics and strong projected growth in Internet population and smartphone penetration. The table below sets forth the revenue and growth of the global games market from 2014 to 2016 and the estimated revenue and growth of the market from 2017 to 2021: Total Revenue of the Global Games Market (US$ billions) CAGR Americas % 3.6% Asia Pacific (ex-china) % 5.6% China % 6.0% Europe % 2.8% Rest of World % 17.3% Total % 5.1% 105

4 Gamers In 2016, there were approximately 2.1 billion active gamers in the world, according to Newzoo. With the number of active gamers set to increase with a 5.4% CAGR from 2017, this number is expected to reach approximately 2.7 billion by The chart below sets forth the number and growth of active gamers globally from 2014 to 2021: Number of Active Gamers (millions) 3,000 2, % 5.4% 1,000 1,815 1,958 2,080 2,210 2,341 2,471 2,600 2, Due to its rapid growth in recent years, Asia Pacific (ex-china) had the largest gaming population globally, with 536 million active gamers in Active gamer numbers in this region are forecasted to increase with a 7.6% CAGR from 2017 and are expected to reach over 778 million in The table below sets forth the number and growth of global active gamers from 2014 to 2016 and the estimated number and growth of global active gamers from 2017 to 2021 by region: Number of Global Active Gamers (millions) CAGR Americas % 1.9% Asia Pacific (ex-china) % 7.6% China % 5.3% Europe % 2.3% Rest of World % 8.2% Total 1, , , , , , , , % 5.4% Millennial vs. non-millennial gamers According to Newzoo, 71.2% of millennials, those individuals aged 12 to 35, and 54.7% of non-millennials, those individuals aged 36 to 65, play games. According to the U.S. Department of Commerce, U.S. millennials spend on average 30 hours on gaming per month, 20 hours longer than Generation X and Baby Boomers. Growing up in a technology-driven world has had a profound impact on millennials behavior and spending patterns. According to Newzoo, they prefer brands that match their lifestyles, rather than the more traditional entertainment and consumer brands. As an on demand generation, millennials view content on smartphones and laptops more frequently than on televisions and often use multiple screens. Millennials are more likely to listen to music, visit social networks and participate in online shopping. Moreover, according to Newzoo, millennials have enthusiastically embraced esports. 73.4% of esports audience are millennials. 106

5 PC vs. mobile games market 2016 marked the first year that mobile games generated more revenue than PC or console games with US$38.6 billion or 38% of the total global games market, having grown at a CAGR of 25.6% from 2014 to In 2017, mobile games is anticipated to take 42% of the global games market, generating US$46.1 billion in revenue, and is expected to grow at a CAGR of 10.6% from 2017, reaching US$68.9 billion in However, PC games have always been and will remain a very important segment of the global games market. PC games revenue is expected to represent over a quarter of the world s US$108.9 billion games market in More than half of all active gamers play PC games. In 2016, there were almost 1.2 billion PC active gamers worldwide, and the PC segment shows relatively strong growth in active gamer numbers with a CAGR of 3.6% from 2017 to 2021, with higher growth in emerging markets. According to Newzoo, China had the largest active PC gamer population worldwide of 293 million in The PC gaming segment has also led the games market to key innovations such as game video streaming, the implementation of free-to-play business models and the explosive growth of esports. The table below sets forth the number and growth of active gamers who play PC, mobile or console games from 2014 to 2016 and the estimated number and growth from 2017 to 2021 by segment: Number of Active Gamers by Segment (millions) CAGR Active PC gamers 1, , , , , , , , % 3.6% Active mobile gamers 1, , , , , , , , % 6.2% Active console gamers % 1.5% Global Gaming Hardware Market Overview Peripherals The global gaming peripherals market emerged with the introduction of genres like first-person shooter (FPS), real-time strategy (RTS), multi-player online battle arena (MOBA) and massively multi-player online role-playing games (MMORPG). With the evolution of competitive PC gaming, the gaming peripherals market is now focused on brand recognition, player performance, features and quality. The gaming peripherals market is fragmented and highly competitive with a wide range of brands and a rapid pace of innovation. The growing popularity of competitive gaming is an important driver of the gaming peripherals market. Only the best and most reliable gaming peripherals will satisfy these competitive gamers. The costs for such products are considerably higher than that of ordinary peripherals for home and business use, which are manufactured by brands that do not specialize in gaming peripherals, such as Microsoft, HP and Dell. 107

6 According to Newzoo, the global gaming peripherals market generated US$2.2 billion in revenue in 2016, growing with a CAGR of 13.4% from 2014 to Headsets and keyboards were the fastest growing categories, but only by a small margin. The global gaming peripherals market is expected to grow with a CAGR of 9.9% from 2017 and is expected to reach US$3.6 billion in According to Newzoo, gamers will continue to regularly upgrade their gaming peripherals because the quality and performance of gaming peripherals are important to the overall gaming experience, especially if used intensively or in a competitive setting. The chart below sets forth the revenue and growth of the global gaming peripherals market from 2014 to 2016 and the estimated revenue and growth from 2017 to 2021: Total Revenue of the Global Gaming Peripherals Market (US$ millions) 4, % 3, % 2,000 1,000 1,695 2,015 2,180 2,443 2,714 2,987 3,274 3, The table below sets forth the global revenue and market share for each category of gaming peripherals in 2016: Headsets Mice Keyboards Others 1 Total Gaming peripherals (US$ millions) 1, ,180.0 Market share 49.9% 24.2% 21.0% 4.9% 100.0% 1 Mainly gaming console controllers and mouse surfaces and excludes components. The table below sets forth the revenue and market share for gaming peripherals by region in 2016, according to Newzoo: Americas Asia Pacific (ex-china) China Europe Rest of World Gaming peripherals (US$ millions) ,180 Market share 38.5% 7.8% 14.3% 37.6% 1.8% 100.0% Total 108

7 Peripherals components and materials The main components and materials for our gaming peripherals are optical sensors, laser sensors, mechanical switches and LEDs. According to Frost & Sullivan, the global average prices of these components and materials remained relatively stable from 2014 to 2016, as the supply and demand for these materials remained stable and there were no significant product upgrades for these materials. The global average prices for optical sensors and laser sensors have slightly increased, while the global average prices for mechanical switches and LEDs have remained unchanged. The table below sets forth the historical global average prices per unit of optical sensors, laser sensors, mechanical switches and LEDs from 2014 to 2016: Component (US$/unit) Optical sensor Laser sensor Mechanical switch LED Source: Frost & Sullivan Report Barriers to entry A significant barrier to entering the gaming peripherals market is having the product development, technology and design expertise to compete successfully on the basis of quality, design and innovation, as the manufacturing itself is often outsourced. In addition, gamers generally find authenticity very important, and building a trusted, highly regarded, authentic brand takes time and requires more than just a large marketing budget. Systems Gaming systems are defined as desktop PCs or laptops sold by companies that are predominantly focused on gaming, or sold by major PC manufacturers using a gaming-specific sub-brand, or systems that are positioned or advertised to appeal to gamers. PC gamers prefer high-performance PCs that allow for an optimal gaming experience, with top-of-the-range components that are critical for playing complex and immersive games. This consumer base prompted the emergence of a number of hardware manufacturers that focus solely on gamers. With gaming systems as one of the few areas of significant growth for many large PC manufacturers, virtually all major PC manufacturers now have a gaming product line or sub-brand. The competitive landscape for gaming systems is very diverse and fragmented. Among the major PC manufacturers, the key players with a gamer-focused sub-brand are Acer, ASUS, Dell, Hewlett-Packard, Lenovo and Gigabyte. Most brands manufacture both gaming desktops and laptops. No single brand accounts for a dominant market share, but in line with global PC market shares, the brands with the largest market shares in terms of volume (units) are Lenovo, HP and Dell, followed by ASUS and Acer. Among the gamer-focused brands, MSI was likely the biggest global gaming system brand in terms of volume in 2016, followed by Alienware and Razer. A key growth driver for the PC gaming market is that games are becoming more graphically intense and immersive, increasing the demand for high-end hardware designed for gaming use. Additionally, as gaming has become a more mainstream form of entertainment, demand for gaming systems has increased in general. 109

8 The gaming systems market has grown steadily, reaching US$19.3 billion in 2016 with a CAGR between 2012 and 2016 of 8.6%, according to Newzoo. The total market is expected to grow with a CAGR of 8.1% from 2017, reaching US$28.7 billion in Gaming laptops, which are sufficiently powerful to compete with desktops but have the advantage of portability, are forecasted to be the main driver of overall growth. The table below sets forth the revenue and growth of the global gaming systems market from 2012 to 2016 and the estimated revenue and growth of the market from 2017 to 2021: Total Revenue of the Global Gaming Systems Market (US$ billions) CAGR Americas % 7.2% Asia Pacific (ex-china) % 11.1% China % 7.9% Europe % 8.3% Rest of World % 10.8% Total % 8.1% Systems components and materials The main components and materials for our gaming systems are CPUs and graphics cards. According to Frost & Sullivan, the global average prices of these components and materials remained relatively stable from 2014 to The global average prices for graphics cards have slightly increased, while the average prices for CPUs have remained unchanged. Generally, the prices of older models will drop over time but producers of gaming systems will also replace the older model with an updated model, the price of which is usually similar to the launch price of the older model, once available. As a result, for the producers of gaming systems, the global average prices of CPUs and graphics cards still remained relatively stable from 2014 to The table below sets forth the historical global average prices per unit of CPUs and graphics cards from 2014 to 2016: Component (US$/unit) CPU Graphics card Source: Frost & Sullivan Report Barriers to entry The barriers to entry to the gaming systems market for non-pc manufacturers are high because it is difficult to differentiate new systems from existing products in an economically viable way. In comparison, the entry barriers to the gaming systems market for existing PC manufacturers are relatively low because PC manufacturing facilities and industry experience are substantially applicable to gaming systems. The main challenge for existing PC manufacturers is generating a healthy profit in a competitive market, which requires either cost leadership or premium pricing on the back of superior product quality, design and branding. 110

9 Mobile In recent years, the global smartphones market has grown rapidly. In 2017, there are expected to be 2.6 billion smartphone users and 3.2 billion smartphone devices in use worldwide, according to Newzoo. Some of the key underlying growth drivers of the smartphone market are the increasing purchasing power of consumers in emerging markets; improving mobile internet infrastructure, particularly as a result of heavy investment in emerging markets; decreasing costs of access to mobile internet (including data); growing demand for devices with high-end specs; and the increasing amount of time consumers spend on their smartphones as the capabilities expand. The table below sets forth the number and growth of smartphone devices in use globally from 2015 to 2016 and the estimated number and growth of smartphone devices in use globally from 2017 to 2021: Smartphone Devices in Use (millions) Growth Rate CAGR Americas % 7.4% Asia Pacific (ex-china) , , , % 11.5% China , , , , % 5.8% Europe % 4.3% Rest of World % 14.1% Total smartphone devices in use 2, , , , , , , % 8.3% According to Newzoo, 20.3% of all active smartphones were high-end smartphones, as of December High-end smartphones are defined as smartphones released in 2015 or later and have a screen size smaller than seven inches, a minimum resolution of 720p, two gigabytes of ram, a minimum of a dual core CPU, near field communication, fingerprint scanning and 4G compatibility. These devices are more suited to playing games with advanced graphics typical of immersive games. Barriers to entry One of the main barriers to entry for the mobile device market is the high initial costs of research and development and prototyping required to make competitive devices, and the subsequent need for significant scale and market share to become a self-sustaining business. The mobile industry is intensely competitive and has generally been characterized by two dominant players (Apple and Samsung), although the dominant players may change from year to year. In addition, a handful of major manufacturers that are much smaller than the two market leaders each have significant scale and operating leverage. The current make-up of the market makes it unlikely that any new entrant will be able to compete on costs. This leaves a combination of brand and superior design and/or functionality as the possible competitive advantages, while quality and performance must be at least on par with the leading brands. However, if history is a guide, the next decade will almost certainly see (relatively) new players disrupt the mobile device market with innovative models and gain significant market share at the expense of established brands. 111

10 Global Gaming Software and Services Market Overview Software The emergence of independent, third-party software applications is closely connected to the growing popularity of desktop and laptop PC gaming and competitive gaming. The main types of software applications that are generally used while gaming, but are independent of the games themselves, include the following: Game launchers: Game launchers are independent or publisher-owned digital game distribution platforms, such as Razer Cortex, one of the world s largest independent game launchers. Some game launchers allow consumers to download entire games online, saving time and offering more convenience compared to going to a physical store. Razer Deals, part of Razer Cortex, may well be the world s leading international price comparison engine for PC gaming titles. Game-related cloud software: Game-related cloud software, such as Razer Synapse and Razer Chroma, allows users to access game settings from various locations or stream rather than download entire games. Game video recording: Game video recording, publishing and live-streaming tools have become very popular after the huge growth in popularity of online video content sharing and of live game-streaming through platforms such as Facebook, Twitch and YouTube. Razer Cortex includes a free video recording and streaming service called the Gamecaster. Communication software: These text, voice and video applications facilitate communication within games or across multiple games. Virtual credits Game developers across console, PC, and mobile have increasingly focused on the sale of downloadable digital content that allow gamers to purchase digital content and items within the game or in-game. Games have evolved from products to continuous services. By offering players options such as buying extra levels, acquiring cosmetic items or new avatars, lucky dip loot boxes or speeding passage through the game, developers and publishers are monetizing content in many new ways. In-game digital spending and digital content distribution have already generated the majority of games industry revenues and are expected to continue to take an increasing share of the global market, according to Newzoo. Players purchase digital content and items in-game either via direct online payment transactions or by using virtual credits purchased on a platform via a credit card or bank transfer, amongst other methods. Virtual credits make it easier for consumers to buy entertainment content. Some gaming companies have their own virtual credits service. Notably, there is no single virtual credits service that is widely adopted by all game publishers globally. According to Newzoo, Razer zgold is in a strong position to become the largest virtual credits service in Southeast Asia. Global Esports Market Overview Esports has turned into a standalone industry, generating around US$500 million in sponsorships, advertising, fees from game publishers, media rights, merchandise and tickets in Global esports revenue is forecasted to increase with a 24.1% CAGR from 2017, reaching US$1.65 billion in 2021, more than triple the total revenue in Brands, media and sports companies across the globe are increasingly investing in this space. 112

11 The global esports audience totaled 322 million in 2016, an increase of 117 million people since 2014, according to Newzoo. The global esports audience is expected to grow to 665 million in 2021, with a 14.6% CAGR from China has the largest esports audience with 106 million people in 2016 and is expected to remain the largest in 2021, reaching a total of 218 million at a CAGR of 14.6% from 2017, but the Asia Pacific (ex-china) s esports audience is growing at a faster rate, with a 20.2% CAGR (not taking into account the Rest of World). The table below sets forth the size and growth of the global esports audience from 2014 to 2016 and the estimated size and growth from 2017 to 2021: Global Esports Audience (millions) CAGR Americas % 12.3% Asia Pacific (ex-china) % 20.2% China % 14.6% Europe % 10.3% Rest of World % 22.5% Total % 14.6% Virtual Reality and Augmented Reality Virtual reality (VR) and augmented reality (AR) are two relatively new trends in the global entertainment industry. VR has not yet gained significant commercial traction, and hardware manufacturers are taking steps to make VR more affordable and have been actively putting their products in the hands of consumers. AR had its breakout in 2016 with the success of the AR-enabled Pokémon GO. Consumers are likely to experience AR through interactive, location-based and personalized advertising. Competitive Landscape We are the leading global lifestyle brand for gamers, according to Newzoo, that offers an integrated portfolio of gaming hardware, software and services. Furthermore, while Razer has different gamer-focused competitors in the various markets it serves, there is no single gamer-focused brand that has the same breadth and strength in terms of products and services across the combination of gaming hardware, software and services in these markets, according to Newzoo. Branding According to Frost & Sullivan, Razer is one of the top gamer lifestyle brands, in terms of top of mind brand awareness, and one of the most satisfying gamer lifestyle brands in several major gaming markets across the world. The table below sets forth Razer s rankings in top of mind brand awareness and most satisfying gamer lifestyle brands in Australia, China, Germany, the United Kingdom and the United States based on surveys conducted between June 2, 2017 and June 6, 2017: Australia China Germany United Kingdom United States Top of mind brand awareness 1 1st 1st 1st 3rd 3rd Most satisfying gamer lifestyle brand 2 1st 1st 3rd 1st 4th Source: Frost & Sullivan Report 1 Question: Which is the first brand that comes to mind when talking about gamer lifestyle brands? 2 Question: Which of the gamer lifestyle brands are you most satisfied with? 113

12 Razer also ranks high in gamer lifestyle brand awareness. The table below sets forth Razer s rankings in non-aided and aided brand awareness in Australia, China, Germany, the United Kingdom and the United States based on surveys conducted between June 2, 2017 and June 6, 2017: Australia China Germany United Kingdom United States Non-aided brand awareness 1 3rd 1st 2nd 5th 4th Aided brand awareness 2 4th 1st 3rd 5th 5th Source: Frost & Sullivan Report 1 2 Non-aided brand awareness refers to the result of a non-aided brand survey where the respondent is presented with the category of gamer lifestyle brands and asked to nominate as many brands as possible. No clues or cues are provided to respondents. Respondents came back with brands that included major PC, mobile and console brands. Aided brand awareness refers to the result of an aided brand survey where the respondent is prompted with a set of brand names and asked a series of questions around those brand names. Respondents were prompted with brands that included major PC, mobile and console brands. In China, Razer is the top gamer lifestyle brand, gaming device brand and esports brand, ranking first in top of mind brand awareness, most satisfying gamer lifestyle brand, non-aided brand awareness, aided brand awareness and most authentic gamer lifestyle brand, according to Frost & Sullivan. In China, Razer is also ranked the number one global gaming peripherals brand in terms of both awareness and preference, according to Newzoo: 39.5% of gamers in China name Razer as their preferred global brand in gaming peripherals, 10% more gamers than any other brand. China had the largest active PC gamer population worldwide and largest esports audience, according to Newzoo. Razer is a global leader in esports, with one of the longest histories in esports sponsorship. According to Newzoo, 69% of active PC and console gamers aware of Razer and view Razer as one of the leading brands in esports with 76% of gamers sharing the same view in China. Hardware According to Newzoo, Razer has successfully positioned itself as a premium gaming peripheral brand. Based on surveys conducted from November 2016, Razer is the leading global brand in terms of ownership across each of the peripherals categories based on an aggregate of China, Europe and the United States, according to Newzoo. Our mice and keyboards each hold the largest market share in their respective categories across China, Europe and the United States. In China, Razer is the top global gaming peripherals brand in terms of ownership of gaming mice, keyboards, headsets and console controllers, according to Newzoo. The tables below set forth Razer s ranking and market share based on surveys conducted by Newzoo in terms of ownership of each Razer gaming peripheral in China, Europe and the United States as of November 2016: Gaming Peripherals Categories China Europe United States Gaming mice ownership 1st (25.2%) 1st (10.7%) 2nd (10.3%) Gaming keyboards ownership 1st (21.9%) 2nd (8.5%) 1st (10.2%) Gaming headsets ownership 1 1st (13.8%) 2nd (5.1%) 3rd (4.3%) Gaming console controllers ownership 1 1st (20.9%) 2nd (5.2%) 2nd (4.6%) 114

13 Gaming Mouse Ownership China Europe United States Total Razer 25.2% 10.7% 10.3% 18.5% Company A 16.2% 9.4% 12.0% 13.7% Company B 7.6% 2.5% 4.7% 5.8% Gaming Keyboard Ownership China Europe United States Total Razer 21.9% 8.5% 10.2% 16.3% Company A 15.7% 10.2% 9.5% 13.0% Company B 7.0% 2.5% 5.2% 5.6% Gaming Headset Ownership 2 China Europe United States Total Razer 13.8% 5.1% 4.3% 8.8% Company A 10.2% 5.9% 5.8% 7.9% Company B 8.7% 2.1% 3.2% 5.5% Gaming Controller Ownership 3 China Europe United States Total Razer 20.9% 5.2% 4.6% 10.9% Company A 14.7% 6.6% 6.6% 9.7% Company C 9.1% 1.7% 3.8% 5.3% 1 Figures do not include Microsoft Xbox and Sony PlayStation branded headsets and console controllers as ownership of those products are high due to the frequent bundling of Xbox and PlayStation headsets and controllers with new consoles. If Xbox and PlayStation branded headsets were included, Razer would be ranked 1st in China, 4th in Europe and 5th in the United States. If Xbox and PlayStation branded console controllers were included, Razer would be ranked 1st in China, 4th in Europe and 4th in the United States. 2 Figures do not include Microsoft Xbox and Sony PlayStation branded headsets as ownership of those products are high due to the frequent bundling of Xbox and PlayStation headsets with new consoles. Xbox branded headset ownership is 5.9%, 13.4% and 31.6% in China, Europe and the United States, respectively. PlayStation branded headset ownership is 1.9%, 12.3% and 20.5% in China, Europe and the United States, respectively. 3 Figures do not include Microsoft Xbox and Sony PlayStation branded controllers as ownership of those products are high due to the frequent bundling of Xbox and PlayStation controllers with new consoles. Xbox branded controller ownership is 17.8%, 32.7% and 49.5% in China, Europe and the United States, respectively. PlayStation branded controller ownership is 7.8%, 38.0% and 40.7% in China, Europe and the United States, respectively. Note: Market share based on responses to surveys conducted by Newzoo during November Question: Of which of the following brands do you currently own a gaming [insert peripheral category]? Choose as many as applied. 115

14 The competitive landscape for gaming systems is very diverse with both gamer-focused specialists and large manufacturers. Razer is the third most popular gaming system brand among gamerfocused brands, according to Newzoo, behind companies which offer broader product portfolios. The table below sets forth the percentage of key gaming brands used to play PC games based on surveys conducted in 2016 by Newzoo in 25 countries: Americas Percentage of Key Gaming Brands Used to Play PC Games APAC (ex-china) China Europe Total Company E 4.4% 4.7% 6.4% 2.5% 4.5% Company F 2.3% 6.1% 5.0% 3.8% 4.2% Razer 2.6% 2.9% 4.8% 1.6% 3.0% Company G 1.9% 2.3% 4.5% 1.5% 2.5% Note: Question: You indicated that you play downloaded or boxed games on a Desktop or Laptop which of the following PC brands do you play these games on? Please choose all that apply. Software and services The market for game-related software is nascent and is currently served by many different companies with different products, services and business models, according to Newzoo. As a result, Newzoo believes the market will offer significant growth opportunities in the form of further revenue potential and the strengthening of ties between a brand and its users through software-based products and services. Newzoo also expects that the most successful companies in this market will need to be highly innovative and have a deep understanding of what is important to gamers. 116